With Additional reporting by Khaled Mamdouh, IOL Staff

NEW YORK, July 16 (IslamOnline & News Agencies) - The international diplomatic quartet on the Middle East Tuesday endorsed U.S. President George W. Bush's call for a Palestinian state within three years, but its members were sharply divided over his demand for Yasser Arafat's ouster.

The United Nations, the European Union and Russia all said at a meeting in the U.S. that they continued to recognize Arafat as the legitimate leader of the Palestinians and would continue to deal with him in that capacity, reported Agence France-Presse (AFP).

UN Chief Kofi Annan, Russian Foreign Minister Igor Ivanov and Danish Foreign Minister Per Stig Moeller representing the European Union, all voiced support for the beleaguered Palestinian leader during a press conference in New York.

"We all share the end objective of two states living in peace side by side.

"What we have to do is to work out how we get there, what is the operational pathway that gets us to that goal in three years time," said Annan.

"As for Arafat we all have our respective positions, the UN still recognizes Chairman Arafat and we will continue to deal with him until the Palestinians decide otherwise."

Ivanov added, "it's only for the Palestinian people to decide who they want to have as their leader. It is the sovereign right of the Palestinian people.

"As for Chairman Arafat he is the legitimately elected leader of Palestine and while he is in this capacity, we will continue to maintain our relations with him."

Moeller said, "We talk to the leader of the Palestinian people, it is up to the Palestinian people to decide who is their leader, we will have an election, and then we will see who will become leader after the elections.

"Whoever is leader is the person the European Union is talking to."

This is an apparent opposition of Bush’s stand as far as Arafat is concerned. Bush has made U.S. aid to the Palestinians conditional with the removal of their symbol and veteran leader.

For their part, the Palestinians voiced pessimism about the quartet meeting, citing the U.S. bias to the Israeli policies.

Meanwhile, the quartet deplored Tuesday's West Bank resistance attack which killed seven Israelis, according to Annan.

"The quartet deeply deplores today's tragic killing of Israeli civilians and reiterates its strong and unequivocal condemnation of terrorism, including suicide bombing which is morally repugnant and has caused great harm to the legitimate aspirations of the Palestinian people," Annan said.

Palestinian resistance activists killed seven Israelis and wounded at least 19 in an attack on a bus near a Jewish settlement in the northern West Bank hours before the quartet met to discuss Palestinian reforms.

Annan, however, failed to address the core of the crisis in the Middle East, namely the Israeli occupation, according to an Egyptian analyst.

“The UN chief is always quick to condemn the killing of Israelis, to appease the United States. But, he rarely tackles the core issue, never called upon Israel to respect the UN resolutions calling for immediate withdrawal from the Arab territories occupied by Israel since 1967,” the analyst told IslamOnline Tuesday, asked not to be named.